Fixed, Variable or Tracker - if you're buying today.

[Regy53]

I just fixed for 5 years because i like to know my outgoings and the rate was like 1.6 percent.

 

[Jez]

I mean overpaying in the sense that I'm paying 5.49% interest when I could be paying 2.49% or something.

In any case, I am overpaying by quite a fair bit in the sense of paying more than the agreed amounts, and I fully intend to keep doing so. I'm hoping to clear the mortgage by the time I'm 50, which would mean taking 15 years off the original term.

You should look into paying the ERC and getting out of that, 5.49% is ridiuclous

 

[Nathan]

Buuuuuuump.

So my 2 year fix is up with Leeds. I like fixing as I know where I stand. We have 63% LTV.

My question is 2 year fix at circa £600 or 5 year fix at circa £645?

Both 999 arrange fee.

I know BofE are likely to increase rates albeit by a quarter of a percent on the 10th.

I don’t know which way to go....

We overpay as much as we can to reduce the term. I’m leaning towards 5 years

 

[cheesyboy]

How much is the loan?

And are there any trackers worth considering?

I remortgaged with HSBC for a portion of my mortgage (approx 55% of it is on a lifetime +0.89% tracker which I wanted to keep ) last summer, and was able to get a fee free mortgage, whose premium over the fee mortgages was low enough that it worked out much better.

 

[Nathan]

I have not considered trackers to be honest as the unknown is a worry...it shouldn’t be as we can afford a significant rise.

The loan is just under 178k. Currently we re paying circa 15% of our monthly income.

So, I need to look into trackers too, I ll take a look

 

[tom_nieto]

Over a short term like 2 years it would be very unlikely that the Bank of England would raise rates so much that your monthly repayment doubles for example. It could happen if there was some sort of catastrophe, but this is highly unlikely. Uncertainty around Brexit and the housing market might affect things, but a tracker could still work out cheaper in the short term. If you’re worried about rate rises after the initial term is up then you’re in the same boat with a fixed as with a tracker come renewal time so this shouldn’t really be taken into consideration.

EDIT - we fixed for similar reasons in 2014 for 5 years. Got a good deal, but would probably have been much better off on a tracker by now in retrospect.

 

[a1ex2001]

There is unlikely to be a significant rise in interest rates in the short term as anything that hits people in the pocket and stops them spending kills the economic growth our capatilist economybrequires to keep working any rise is going to have to be incredibly slow I would expect it to take decades at best to get back where is was before the melt down and even then rates were low from a historical perspective.